Mobile Innovation

How Mobile Ticketing Can Prevent Discounted Fare Fraud

The transit sector is leveraging mobile ticketing to solve front-end problems and improve customer experiences. We’ve seen transit agencies across the country roll out mobile apps to offer their riders a more convenient, secure, and seamless ticketing process. However, most transit agencies aren’t aware of how much they could improve back-end operations with a mobile solution.


During the recent APTA Fare Collection/Revenue Management and TransITech conference, I spoke directly to transit agency decision-makers about their operational pain points and how the benefits of mobile ticketing can reach beyond just the rider experience. Effectively managing reduced fare programs – a consistent source of fare fraud – is one of the most common issues agencies face, yet solving the problem with mobile technology doesn’t seem to be on anyone’s radar.


The pain points of reduced fare programs
Most transit agencies offer various discounted fare products to riders who meet specific eligibility requirements. Common cases include student passes, reduced fares for senior or disabled citizens, and employee benefit programs. Any agency employee who has experience managing discounted passes understands how intensive the process can be, and the multitude of challenges it poses.


When an agency purchases discounted cards and passes, the products first go through an encoding process, then are stored in a secure facility. Revenue operations staff have to count, pack, and seal bulk orders of these discounted passes, and along with an armed police officer, they transport them to sales locations. Once the products arrive at each location, clerks and supervisors go through stacks of passes at the beginning and end of each day, manually counting the inventory to confirm that nothing is missing. This daily tracking process takes hours and costs agencies millions of dollars annually. And there is still internal fraud and theft.


Managing lists of customers who are eligible to purchase discounted fare products is another cumbersome process. Fare fraud has, understandably, made agencies cautious when distributing discounted passes. Unfortunately, that means eligible riders have more hoops to jump through when proving their eligibility.


But say you ironed out every logistical issue – the challenge of riders stealing and sharing reduced cards and tickets still exists. Over the past 15 years of working in this field, I’ve found that if an agency provides discounted passes, they have problems with unauthorized purchases and unauthorized use. It’s a given. Grandkids are using their grandparents’ senior passes; non-students are getting ahold of student passes (from UC Berkeley to Chicago) – all at the expense of transit agencies.


Earlier this year, the public transport authority in Perth, Australia, found that hundreds of commuters were using discounted SmartRider cards illegally. Some riders owe the agency more than ten thousand Australian dollars for accumulated stolen travel. As long as discounted fare products reside on physical cards, they’re vulnerable to fraud.


A mobile solution
Agencies should adopt an integrated mobile solution instead of a stand-alone ticketing app to solve these challenges. Mobile ticketing combined with a centralized web-based portal for back-end operational control would enable transit agencies to create and manage online inventories of reduced fare products more efficiently and securely. Imagine a mobile app for your riders and a web app for your employees. Gone would be the days of manually transporting, storing, and counting stacks of passes.


From an online portal, agencies could distribute discounts to eligible riders’ mobile devices, or instantly rescind discounted passes from any user who does not meet the eligibility requirements. Mobile ticketing also eliminates pass sharing, since it’s virtually unheard of to share your smartphone. On the rider’s end, a single mobile app can house everything they need to travel, from schedules to tickets – all updating in real-time.


So what you’ve heard time and time again is true – mobile ticketing is ideal for riders. But it’s also perfect for agencies. Eliminate theft, fraud, and inefficient logistics in one fell swoop. The key is opting for a complete solution that will streamline both customer experiences and back-end operations.


Please note that this article expresses the opinions of the author and does not reflect the views of Move Forward.